- 08
- OCT
Best practice for best price: The category management techniques that count
Author: Kevin Monahan - Categories: Benchmarking
The Procurement Intelligence Unit (PIU) today launched its 'Cost Mastery' benchmarking study - research that, we hope, will enable procurement organisations across the world to identify the behaviours and practices adopted by the top performers when it comes to the indirect spend categories that really matter.
The PIU has set up a working group consisting of 10 leading global figures in the procurement community, a group that recently gathered for a workshop in Basle (Switzerland) and a project that is being led by Sammy Rashed, Head of Sourcing - Global Sites at Novartis Pharma, a chartered member of the PIU. The working group has identified 12 easily comparable indirect categories, ranging from management consultancy to legal services and paper to financial audits.
The study itself isn't so much concerned with the price organisations are paying for items, but more the means by which the price is achieved. In other words, the organisational behaviours, practices and controls that can positively or adversely affect the final price we pay. As with any study of this nature, complete confidentiality is assured, with any price-related information being omitted from both any future discussions and any output material resulting from the original findings.
Of course, given the recent economic turmoil, procurement is coming under increasing pressure to justify not only its own decisions, but also those made by suppliers throughout the supply chain.
Being armed with the kind of information that enables a procurement organisation to have complete confidence in those decisions naturally leads to a strengthening of its position within the wider business - as well as, ultimately, having a positive impact on the company's bottom line.
Just how much 'Cost Mastery' the majority of procurement organisations can boast at the current time remains to be seen, but one thing is certain. As the focus on cost increases, it has rarely been as critical.